Pump.fun explained for new traders

What pump.fun is

Pump.fun is a permissionless launchpad: pick a name and image, and a token goes live instantly on a bonding curve. There is no team funding liquidity up front and no gatekeeping — which is exactly why both the volume of launches and the rate of failure are enormous.

How bonding-curve pricing works

Price is a mathematical function of how much has been bought from the curve, not an order book. Each buy pushes the price up; each sell moves it down. The earliest buyers get the lowest prices — which is why snipers race to be first in the launch.

Liquidity before graduation

Pre-graduation, the curve itself is the liquidity — there is no separate LP for a team to pull. That removes the classic liquidity rug, but leaves real risks: heavy sniping, bundle buys, and concentrated early supply that can dump.

What graduation means

When the curve fills (historically around a ~$69k market cap), the coin graduates: the SOL collected on the curve seeds a new Raydium pool and open trading begins there. Only a small fraction of launches ever reach this point.

The specific risks on pump.fun

• Most coins fail fast — the default outcome is near-zero.
• Heavy sniping and bundle buys concentrate early supply.
• Post-graduation pools carry normal rug risk.
• Cheap launches mean an endless flood of low-effort and scam coins.
• Wash trading and hype make weak coins look hotter than they are.

How to approach it sanely

Because launching is trivially easy, your selection must be stricter, not looser. Triage launches with a framework: check early-holder concentration, authorities and (post-graduation) LP, and demand quality via unique buyers. Size small, because launches are maximum variance, and pre-set your exit.